Canales v. A.H.R.E.

The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge

MEMORANDUM OPINION

This matter comes before the Court on Defendant A.H.R.E., Inc.'s (hereinafter "AHRE" or "the Corporation") motion to set aside the October 17, 2007 order granting Plaintiffs Wilfredo Canales and Maria Rivera default judgment in this instant case. After a thorough review of the Parties' submissions, the administrative record, applicable case law and statutory authority, the Court shall deny AHRE's motion for the reasons that follow.

I. BACKGROUND

A. Complaint and Summons

On February 21, 2007, Plaintiffs filed the above-captioned action against AHRE, as well as against DDI Construction Company, Seong Kun Chong and John Does 1 and 2 (collectively "Defendants"), alleging violations of the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (the "FLSA"), D.C. Code. §§ 32-1002, et seq. (the "D.C. Wage and Hour Law"), and D.C. Code §§ 32-1301, et seq. (the "D.C. Wage Payment Law"). See Compl., Docket No. [1]. Plaintiffs assert that they were hired by Mr. Chong to perform day labor for AHRE from May 2006 to June 2006. Id. Plaintiffs further allege that they were hired as "non exempt" employees for purposes of the FLSA, the D.C. Wage and Hour Law, and the D.C. Wage Payment Law, but that Defendants failed to pay Plaintiffs minimum wage, overtime, and promised wages for labor and services as required under those statutes. Id. at ¶¶ 4-6, 11, 39-56. Plaintiffs therefore filed suit seeking damages, attorneys' fees, and costs. See Compl.

Mrs. Helen Kim, AHRE's owner and registered agent, was personally served with the Complaint and Summons on February 28, 2007, seven days after the Complaint was filed and well within the 120 day time limit for service, pursuant to Federal Rule 4(m). See Plaintiffs.' Opposition to Motion to Set Aside Default Judgment, Docket No. [17], ("Pls.' Opp'n"), Att. 2 (Return of Service); FED. R. CIV. P. 4(m). AHRE does not dispute this. See AHRE's Motion to Set Aside Default Judgment, Docket No. [16], ("Def.'s Mot."), Att. 1 (Affidavit of Helen Kim ("Kim Aff.")) (admitting receipt of the Complaint).

B. Plaintiffs' Motion for Entry of Default

Having been properly served with the Summons and Complaint on February 28, 2007, AHRE's response was due no later than March 20, 2007. FED. R. CIV. P. 12(a)(1)(A)(i) (requiring a defendant file an answer within 20 days after being served the summons and complaint). AHRE did not file an answer with the Court by March 20th nor did the Corporation request an extension of time to permit it to provide the necessary response to the Court. Pls.' Opp'n at 2. Accordingly, on May 1, 2007-more than a month after AHRE's answer was due-Plaintiffs moved for entry of default pursuant to Rule 55(a). Id.; see also Plaintiffs' Motion for Entry of Default, Docket No. [6].The Clerk of the Court subsequently entered AHRE's default on May 2, 2007.*fn1 Pls.' Opp'n at 2; see also Clerk's Entry of Default as to AHRE, Docket No. [9].

AHRE claims that it did not receive notice of the Plaintiffs' Motion for Entry of Default. Def.'s Mot. at 2; see also AHRE's Reply in Support of its Motion to Set Aside Default Judgment ("Def.'s Reply") at 3. Indeed, AHRE submitted an affidavit from Mrs. Kim, AHRE's registered agent, averring that, with the exception of the Complaint and Summons, she did not receive "any document, pleading, or notices of any motion" in this case. Kim Aff. In contrast, Plaintiffs have submitted sworn affidavits averring that Plaintiffs' counsel mailed copies of the Motion for Entry of Default, as well as the Motion for Default Judgment (as discussed below, see infra 7-8), to Mrs. Kim via U.S. first-class mail. See Pls.' Opp'n at 10-11; see also id., Att. 1(Katherine Leong's Declaration in Support of Opposition to Defendant AHRE's Motion to Set Aside Default Judgment ("Leong Decl.")); id., Att. 7 (Cathy S. Lavin's Declaration in Support of Opposition to Defendant AHRE's Motion to Set Aside Default Judgment ("Lavin Decl.")); id., Att. 8 (Bobby L. Young's Declaration in Support of Opposition to Defendant AHRE's Motion to Set Aside Default Judgment ("Young Decl.")).

Plaintiffs are correct that "[p]roof that mail matter is properly addressed, stamped and deposited in an appropriate receptacle has long been accepted as evidence of delivery to the addressee." Legille v. Dann, 544 F.2d 1, 5 (D.C. Cir. 1976). The D.C. Circuit, however, has emphasized "that the presumption is rebuttable." Id. ("If the opponent does offer some evidence to the contrary (sufficient to satisfy the judge's requirement of some evidence), the presumption disappears as a rule of law, and the case is in the (factfinder's) hands free from any rule."). AHRE has provided Mrs. Kim's affidavit averring that she never received any notice, and the Court finds this sufficient evidence to rebut the presumption of delivery. "On a motion for relief from the entry of... a default judgment, all doubts are resolved in the favor of the party seeking relief." Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980). Because all doubts are resolved in AHRE's favor, the Court shall assume, for purposes of this Memorandum Opinion, that AHRE did not receive notice of the Motion for Entry of Default.

C. Communications Between Mr. Kim and Plaintiffs' Counsel

1. May 11, 2007 Letter From Mr. Kim to Plaintiffs' Counsel

On May 11, 2007, nine days after the entry of default against AHRE, Mr. Albert Kim-Mrs. Kim's husband-responded for the first time to the lawsuit by writing a letter to Plaintiffs' counsel, Ms. Katherine Leong. See Def.'s Mot., Ex. 1 (May 11, 2007 Letter From Mr. Kim to Plaintiffs' Counsel ("May 11, 2007 Letter")). Mr. Kim did not provide any similar response to this Court.

The letter, in pertinent part, states as follows:

After some difficulty we have located Mr. Seong Kun Chong and he has signed a hand-written agreement (witnessed by one of our employees that work with Mr. Chong at the Embassy) to pay Mr. Wilfredo Canales and Ms. Maria Rivera for working for Mr. Chong at the Embassy project in Washington. Please know that Mr. Canales and Ms. Rivera did not work directly for our company at this project and Mr. Chong was paid in full for the work that he and his employees did at the Embassy project.

Id. The letter also states that a copy of AHRE's agreement with Mr. Chong, as well as copies of the checks from AHRE to Mr. Chong for the work rendered, were enclosed with the letter. Id.*fn2

Although the letter was written on AHRE's letterhead, the letter does not inform a reader who Mr. Kim is, what official role, if any, he has with the Corporation, or whether Mr. Kim possessed authority to speak on behalf of AHRE. See id. Neither is it clear from the record now before the Court what Mr. Kim's official role is with the Corporation. Although AHRE appears to indicate that Mr. Kim is a co-owner of the Corporation, along with his wife, see Def.'s Mot. at 4, AHRE's briefing does not clarify Mr. Kim's official position, if any, at AHRE or whether he has any authority to act on behalf of the Corporation.

AHRE claims that Mr. Kim sent the May 11, 2007 letter in response to a request by Plaintiffs' counsel for proof that the Corporation paid Defendant Chong in full. Def.'s Mot. at 2, 4; Def.'s Reply at 2. Plaintiffs dispute this allegation. See Pl.s' Opp'n at 3. Upon review of the record, the Court finds that nothing in the May 11, 2007 letter itself indicates that it was sent at the request of Plaintiffs' counsel, see May 11, 2007 Letter, and AHRE has not provided any other evidence indicating that Plaintiffs' counsel requested proof of payment from AHRE or that Plaintiffs' counsel engaged in any discussions or communications with AHRE prior to May 11, 2007. Moreover, although AHRE broadly references "discussions," "contacts," and/or "communications" between Mr. Kim and/or Mrs. Kim and Plaintiffs' counsel, AHRE provides no evidence that any such communications (other than the May 11, 2007 letter) occurred. See Def.'s Mot. at 2, 4; Def.'s Reply at 2, 5. In contrast, Plaintiffs have submitted a sworn declaration, provided under penalty of perjury, from Ms. Leong declaring that she did not engage in any communication with AHRE, other than the May 11, 2007 letter and her response (as discussed below, see infra ...

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